At last week’s seminar Mr Franz Ruch of the South African Reserve Bank spoke on the topic of the tapering of quantitative easing in the U.S. and what it means for monetary policy in developing countries like South Africa.

It was a good opportunity to talk about all the things that you would read about in the econoblogosphere: QE, the global savings glut, secular stagnation, taper tantrum, austerity and the confidence fairy all under the heading of the macro wars. Franz’s analysis showed that there are many different channels through which capital flow reversals can influence the economy. Unfortunately there are not as many policy options: